Talkin' Heroclix Special: A Conversation with Justin Ziran, Part One

Welcome to the Comic Shenanigans Podcast!

For this special text-only edition of Talkin' Heroclix, we had the distinct pleasure to interview Wizkids President Justin Ziran for the show. 

There will be 2 or 3 parts to this special edition verison of the Comic Shenanigans show, in this exclusive text-only edition. In this first part, we discuss the more business-centric aspects of Wizkids' business.  Future installments will focus more on the game of heroclix itself, and will involve Justin and his design/ R & D team answering listener and hcrealms user-submitted questions.

Once you've read the following interview, head over to http://www.hcrealms.com/forum/showthread.php?p=8529387#post8529387, where you can post about your reactions to the questions, and post follow-up questions. Justin will be stopping by the thread here and there to answer questions and respond to some of the feedback to the answers below.  Please keep it civil and respectful, that's my only request.  On with the show!

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Comic Shenanigans: We have lots of listener questions, so I’m going to turn the questions over to the Hcrealms community, as well as listeners of the show. I understand you may have to decline answering many of them, or give a base “no comment”.

 Nathan Struk asks: “To What Extent has Marvel restricted the ability to make X-Men or Fantastic Four heroclix?”

JAZ: Marvel, and for that matter, all licensors ask us to support their current initiatives because they spend millions of dollars to promote and expose their property to new consumers.  Being good partners, we support them where we can and at the same time represent our interest and opinions as well.  Marvel has been particularly good with giving us space to explore the IP as we see fit.  A good example is the forthcoming Uncanny X-Men set releasing this spring.

 Short answer: It is always a discussion.  Sometimes it is a short discussion, sometimes it is a long discussion, but in the end we get to a point that is mutually agreeable.

Nathan Struk asks: “To what extent do you think Wizkids owes transparent operations/conduct to the fans of the product?”

JAZ: In our industry (hobby games), you have a lot of passionate people (fans) as end users, retailers, distributors and even employees.  The demand for more information at all levels is enormous.  Having managed many product lines and businesses, all with passionate fans, I’ve seen companies spend so many resources being transparent only to realize that the underlying business was faltering. They took their eyes off the ball. 

I am VERY careful to assign our employees to the projects that move the company forward. As we’ve grown, we’ve  been able to do a lot more of our core business with the same amount of people and that has provided the opportunity for us to dedicate more resources to marketing and Organized Play (both of which are useless without a solid product). My personal view is transparency is important and companies should be as transparent as they can, provided they keep the business healthy. In all honesty, transparency is healthy for business right up until the point where it consumes the business.

What do I mean by “consumes the business”? Keep in mind that collectively, the community has unlimited time and unlimited requests for information, while the company has limited time and limited information (in some cases).  When we came from Topps to NECA we decided to focus on the product and communicate factual information in a timely fashion, with varying degrees of success. We’ve come a long way in 6 years, with new websites, a new event system, new e-mail distribution lists, and more employees committed to our communication programs.  We still have a lot of room to grow as well.  I just want to be responsible about everything we do so that we’re here for many years to come and continue to provide good product to our consumers.  With all of that in mind, we’re trying to push more information out there in a way that works for our business.  We haven’t structured ourselves to be the company with all its employees on the message boards.  However, we’re coming up with ways to share information, insights and facts with the consumers and retailers in a scalable way. (Meaning that as we grow, the demands of providing the information don’t grow disproportionately.) 

Short answer: Yes we can be more transparent but that requires resources. In a business where margins are thin, it’s hard to carve off a large section of staff to be community managers and still stay focused on the  business and product.  We’ve seen very positive responses to the new programs and we’ll continue to expand programs like the Design Insight series of articles. 

Nathan Struk adds: “Thanks for the recent rules changes, as well as the Rules articles. The increased transparency has been great as a longtime fan of the game.”

JAZ- You are welcome! This is an example of how we’re going to try to improve transparency.  We have a lot of good ideas rooted in sound reasoning.  We’re going to share that with people more openly as we move forward. However, be aware that it may have some starts and stops as we learn what the right balance is. We do think it’s important and hope to build consistency over time.

AJ Reece asks: “How large is the team at Wizkids, and specifically the team that works on Heroclix?”

JAZ: There are about 20 people +/- working on the Wizkids business.  We also share a few resources (logistics, finance, legal) with our parent company, NECA. Pound for pound we’re probably one of the more productive companies on a per employee basis.  When we talk with other companies in the industry we find that they have many times the number of people running similar parts of our business, but our  business is unique in terms of cash flow and cost expenditures. For those who might say “If you scaled up your business you’d get more money to support it”- We’ve been down the overstaffed company before (in previous incarnations of WK) and it actually causes more issues than it solves.  Given the how the business works, we think the current staffing formula is best. However, we have identified areas that need some attention and we’re taking steps to get them handled.

AJ Reece asks: “How has Wizkids been able to keep the price of a standard booster relatively the same price since the carded era, and stem the tide of inflation?”

JAZ: The previous questions answer some of that, but first and foremost, we try to be responsible shepherds of the business. Part of that is leveraging our position as the largest 1.5” figure and dice manufacturer in the world across our businesses. Secondly, we don’t hire irresponsibly and try to keep resources focused on products.

Price increases are challenging for consumers and the manufacturers. Every increase puts the product that much farther out of reach. Also, it may be useful to let some of your followers know that every dollar at retail results in only a fraction of that revenue ending up towards our business.

We try to exhaust every possible option at our disposal before we raise prices.

In my view, price increases are the lazy person’s way of getting profitable. Sometimes a price increase is necessary but often it masks underlying issues with the business (over staffing/too many people, lack of control of one’s supply chain, cost creep).

 I’ve been asked several times over the past year if we should raise prices. My first questions are have we pushed back on our suppliers, have we challenged our belief that we need expensive component X, Y, or Z? I am not saying price increases aren’t part of life, they are. We owe it to the customers to make sure we exhaust every option available to use before we increase cost. It’s good for us and it’s good for the customer.

AJ Reece asks: “Will the sales of TMNT be used as an indicator for future non-comic properties, or are these side sets going to happen regardless, to some degree (such as Lone Ranger, etc)”

JAZ: Yes, but… We’re always going to try new things. Some projects are no-brainers (like TMNT) but some are more speculative (Street Fighter). In the past, we were trying a lot of different things. Some were surprise hits, like Street Fighter, and some not so much. Given the rapid expansion of the product line, we decided to cut back both on properties and even some SKUs (primer displays, etc). We were hearing and seeing some signs of this and made the decision to slow down the expansion of the platform. It has allowed us to circle back and start tackling some of the items we’ve been wanting to tackle for a couple years.

Hcrealms user Wilx asks: What does it take to get a new property into Heroclix?  If Turtles does well could we see expansion into more properties?

 JAZ: It depends, and honestly there are too many factors to give a meaningful answer. In the end, we look for depth of content, fanbase, appropriateness and a lot of financial criteria. Sometimes we take a more strategic approach where we ask ourselves “Do we want to be in the Kaiju (Godzilla) space?” and move past a lot of questions I outlined above.

 Matt Miller asks: “Are there plans to cover this year’s Worlds matches on Twitch?  If so, will there be colour commentary?”

JAZ: The intent is there; we’re just deciding how to handle it this year, internally or outsourced. If we can figure out how to do this in a cost-effective manner we’ll do it in house. If it pulls too much focus, we’ll outsource this to a community group or contractor and yes, I would like to see colour commentary, as 50 minutes of technical Heroclix talk can cause brain damage.

Matt Miller asks: “What is next for heroclix technology-wise?  More tab app type stuff, or a new HCOnline?”

JAZ: No TabApp, which was a novel attempt at broadening the appeal of the platform to a younger audience that ultimately failed to catch on. Our latest trial was Extreme Heroclix – we supersized two figures and placed them in a new retail channel. The intent was and is to see if a non-gamer will purchase a figure and find their way to a local game store. I know many of the fans didn’t understand the initiative; in some ways, that was by design. If we wanted to sell to existing players we would have put them at the game stores. 

So far, Extreme Heroclix is our best selling SKU we’ve EVER placed at Toys R Us (even going back to Topps era Wizkids). While I know some existing players have purchased them, I am confident a lot of new consumers have dabbled in the line as well.  We’re still working the math on the supersized line. If we can make the financials work, we’ll sharpen the message… “Buy at chain X and go to play at your friendly local game store (FLGS).” We’ll probably expand the offering to something that makes sense for the game and lastly, we’ll figure out how to pull in our loyal partners the game stores into the program.

On a side note, while I was explaining the program to a group of FLGS retailers a couple of ideas came up. 1: A few savvy retailers asked to create a demo kit using the larger figures, saying it would make a new customer’s first experience with the game a lot easier and more eye-catching. 2: If we continue to see success we could release a series of figures for local games stores as well as the figures for the larger chains. 

Matt Miller asks: “Which is a better chili garnish, cheese-its or fritos?” 

JAZ: Cheez-Its – Costco sized. 

SpyderNick88 asks: “When will the print and play materials be updated for 2015 sets?”

JAZ: There are a lot of complicated licensing issues when it comes to print-n-play. If it was easy, we’d be all over it. If I could outsource it to a 3^rd party or help the community do it without exposing people to a lot of legal risk, I would. In the end, we’re still working through issues and I can’t really discuss anything as we don’t have really actionable info. What I can say is that we’ve stopped updating print-n-play materials and we’ll have to stop the community from doing it as well- trust me, it is in everyone’s best interest.

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That's all for Part 1 of our interview with Justin Ziran. Over the next month, we'll have more from the interview as we delve more into the game itself, as questions will get answered by Justin and the design team!

Respond to the interview at this thread: http://www.hcrealms.com/forum/showthread.php?p=8529387#post8529387